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Senator Sinodinos stands aside

Prime Minister Tony Abbott informs parliament that Senator Arthur Sinodinos will stand aside from his ministerial responsibilities until after ICAC has finished its investigation of Australian Water Holding.

Assistant Treasurer Arthur Sinodinos has stepped aside from the frontbench after political pressure over business dealings that are before a NSW anti-corruption inquiry.

The Assistant Treasurer made a short statement at the beginning of Senate question time on Wednesday, after weathering three days of damaging headlines about his involvement in Australian Water Holdings - a company associated with corrupt former Labor minister Eddie Obeid.

Senator Sinodinos will stand aside from his senior role in the Abbott government while giving evidence to the Independent Commission Against Corruption.

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Minutes after Senator Sinodinos stepped aside, Prime Minister Tony Abbott rose at the beginning of the House of Representatives question time to say Senator Sinodinos had done the "right and decent thing".

Mr Abbott said that Senator Sinodinos had informed him earlier on Wednesday of his "decision to step aside for the good of the government".

Former PM John Howard, pictured with Arthur Sinodinos in 2006, has released a statement in support for his former chief of staff. Photo: Andrew Taylor

He said Senator Sinodinos would "draw no ministerial salary and have no access to ministerial entitlements", but insisted that the senator had stood aside and not resigned.

"Senator Sinodinos has done the right and decent thing as you'd expect and for someone who has given our country such long and faithful service," Mr Abbott said.

The ICAC inquiry heard on Monday that Senator Sinodinos, then NSW treasurer of the Liberal Party, was installed on the board of the Obeid-linked AWH in 2008 "to open lines of communication with the Liberal Party".

It heard that Senator Sinodinos, who was earning $200,000 a year for "a couple of week's work", stood to enjoy a "$10 or $20 million payday" if AWH had won a lucrative contract with the NSW government.

Senator Sinodinos was chief of staff to former prime minister John Howard from 1997 to 2006.

Earlier on Wednesday, shadow treasurer Chris Bowen called on Senator Sinodinos to appear before the Senate to explain himself.

"If he can't do that then he should stand aside," Mr Bowen told Sky News. "And if he won't stand aside the Prime Minister should show some leadership and stand him aside this morning."

Shortly after midday, with support from Labor and the Greens, the Senate voted to ask Senator Sinodinos to come into the chamber and make a statement about his dealings with AWH.

Labor had set a deadline of midday during the preceding debate, and government senators quickly protested that the Assistant Treasurer had not been given the opportunity to comply.

As recently as this morning, Senator Sinodinos' colleagues rejected calls for him to step aside. Senior Liberal MP Josh Frydenberg suggested that he and his colleagues were willing to withstand considerable political damage to defend the Assistant Treasurer.

''If I was in the trenches, the one person you would want next to you would be Arthur Sinodinos,'' Mr Frydenberg said.

''And now we're going to be in the trenches with him.''

Asked how Senator Sinodinos was coping with the pressure, Mr Frydenberg said: ''As you know Arthur Sinodinos has been around politics for a very long time, including as a distinguished chief of staff to the prime minister.

''[Sinodinos] has dealt with some difficult times and he always gets through.

''So I have no doubt that he's coping very well in these circumstances.''

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